The Ends of 27 Big Depressions

Kevin O'Rourke, Martin Ellison and Sang Seok Lee

No 15061, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How did countries recover from the Great Depression? In this paper we explore the argument that leaving the gold standard helped by boosting inflationary expectations and lowering real interest rates. We do so for a sample of 27 countries, using modern nowcasting methods and a new data set containing more than 230,000 monthly and quarterly observations for over 1, 500 variables. In those cases where the departure from gold happened on clearly defined dates, it seems clear that inflationary expectations rose in the wake of departure. IV, diff-in-diff, and synthetic matching techniques suggest that the relationship is causal.

Keywords: Gold standard; Great depression; Inflationary expectations (search for similar items in EconPapers)
JEL-codes: F33 N10 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-cwa, nep-his and nep-mon
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Citations: View citations in EconPapers (1)

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Journal Article: The Ends of 27 Big Depressions (2024)
Working Paper: The Ends of 27 Big Depressions (2020)
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